PayPal, the payments company, said, that it had received a subpoena from the U.S. Securities and Exchange Commission (SEC) relating to the stablecoin PYUSD.
In August, the firm became the first among the giants of the financial markets launched a ‘stablecoin’. The issuer of the dollar-pegged asset was the infrastructure crypto firm Paxos.
The PayPal initiative has drawn mixed reactions from participants in the crypto community. Some said PYUSD would spur broad adoption of digital assets, while others highlighted centralisation risks.
JPMorgan analyst Nikolaos Panigirtzoglou said that the coin could benefit Ethereum by increasing the total value of assets locked in the network.
Bank of America analysts projected only modest uptake of PYUSD due to competition from central bank digital currencies and widespread stablecoins. Analysts at Nansen confirmed initially weak demand for the asset.
However the PayPal ‘stablecoin’ has raised concerns in the U.S. Congress about the lack of a regulatory framework for such assets.
“The subpoena requires the production of documents. We are cooperating with the SEC regarding this request,” the company said in its regulatory filing.
As of writing, PYUSD’s market capitalization stood at $159 million, up 68% over the past 30 days. The coin ranks 15th in the sector, led by USDT from Tether, with a market offering of more than $85 billion.
As previously reported, USDT co-founder William Quigley said that PYUSD would not bring “much innovation,” but would provide PayPal with additional profits.